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Google inks landmark deal with France

France and Google have reached a landmark deal on publishing rights for the worldwide web. The Internet giant is now doing business with newspaper publishers. What does that mean for the industry in other countries?

French President Francois Hollande and Google CEO Eric Schmidt signed a landmark agreement on Friday (01.02.2013) in Paris. The deal allows Google to display news content in its search result in exchange for 60 million euros ($81 million) worth of support for French publishers. Eric Schmidt described the deal as a "historic." His choice of words made it sound like two countries had just signed a peace treaty.

But Christian Solmecke, a copyright lawyer and media expert, does not believe the description is an exaggeration.

Christian Solmecke believes that other countries could follow France's example

"No. There has never been such an event. The agreement is also historic because a government is involved," he said.

The agreement also shows that "Google has a lot of power, but is generally ready to negotiate. That situation is new," he added, noting that the deal between France and Google could serve as an example around the world because the Internet giant is involved in copyright battles with newspaper publishers in other countries.

Google has to pay

The dispute regarding the use of content on the Internet is at the core of this dispute. Google displays the content from publishers in its search results, but doesn't pay any of the revenue to media companies. For example, headlines and parts of text which are linked to ads on Google's search results. The struggling newspaper industry wants a chunk of the millions in ad revenue that Google receives. But the Internet giant argues that millions of readers find the news articles via its search engine, meaning that newspaper companies are also benefiting.

For weeks, intense negotiations went on in France. And the resulting deal was good for both sides. Apart from the millions that Google will pay to support publishers, the Internet giant will also give the news organizations access to its advertising platforms, to help raise the publishers' revenues with the help of Google services. Google also benefits, of course. It can publish the headlines and images from the news organizations, license-free.

Is this an example for Germany?

But Google didn not agree to the deal without pressure. The French government threatened that it would implement copyright law, which would have meant that Google would have had to pay for the content that it was displaying from the publishers in its search results. This is also being discussed in Germany, where the Bundestag is looking into the issue.

But a similar agreement to the one in France is not an option for German publishers.

"France's solution is a bet on Google's monopoly," says Christoph Keese, a spokesman for the intellectual property right work group of newspaper and magazine publishers.

A search for "ancillary copyrights" on Google

That would mean that if Google lost its monopoly, publishers would have to negotiate deals with new providers. As a result, German publishers favor a universal legal solution.

But copyright lawyer Christian Solmecke does not share this view.

"An agreement would be better than a law because a law would also be to Google's advantage. An agreement would allow publishers to negotiate new deals later with other parties in the market." He believes that similar deals will be replicated in other countries. The same happened after the first online music file sharing went online; others followed.

A group that is often not heard from in the debate on copyrights is the owners of copyrights themselves, such as journalists and authors.

"We do not see the agreement in France as an example," says Hendrik Zörner, the spokesman of the German Journalists' Association (DJV). He believes another aspect is decisive for the dispute over copyrights and Google.

"An agreement between publishers and Google isn't enough. The copyright owners must also be taken into account," he said.

One thing that is clear for now is that the agreement in France prevented the escalation of the dispute with Google. And only time will tell whether publishers can increase their revenue and how copyright owners will be included in future agreements.